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Boston immobilised as hunt for terrorist continues

Policeman killed at MIT, sparking manhunt

A police officer for the Massachusetts Institute of Technology was shot to death on Thursday night at the school's Cambridge campus, touching off a manhunt for a suspect or suspects in a community on edge just days after the Boston Marathon bombing. Follow us at http://twitter.com/photosSMH Photo: AP Photo/Jose Luis Magana

An American hub of finance and technology was immobilised Friday by a terrorist manhunt that idled or distracted more than 1.5 million workers.

As heavily-armed police and FBI agents zeroed in on a suspect in the Boston marathon bombing, authorities shut down public transit and advised businesses to close and residents to lock themselves in their homes.

The security edict kept Morgan Stanley's Boston offices dark, most Fidelity Investments workers at their home computers and diners and ticket-buyers away from downtown restaurants and a visiting circus. The local baseball and hockey teams -the Red Sox and Bruins - cancelled home games scheduled for tonight.

"I've been in Boston for my entire life, and it's a very surreal feeling," Bill Elcock, chief executive officer of Batterymarch Financial Management, said in a telephone interview today. "Normally, it's a bustling city on a Friday afternoon, and now it's virtually empty."

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Batterymarch, which manages $12.8 billion, decided at 6 a.m. to close its 85-employee office. A lone trader remained to execute trades since managers can't do that at home, Elcock said.

For most in Boston's $1 billion-a-day economy - larger than Singapore's - the damage will probably be short-lived if the suspect is caught soon and the city is allowed to get back to work. Passengers and cargo were moving normally through the city's air and seaports.

"The economy doesn't shut down completely," said Jim Diffley, chief regional economist at IHS Global Insight in Philadelphia. "A lot of activity that would've taken place today takes place tomorrow or Monday."

Scant Comfort

That was scant comfort for the Big Apple Circus Ltd., on a limited engagement next to City Hall. "We went from robust ticket sales to trickling ticket sales," said Lynn Stirrup, executive director of the circus, which is running from March 26 to May 12. "We are expecting a significant impact overall." Tonight's performance was canceled.

At some businesses, the day's drama outweighed the disruption. Several Dunkin' Donuts stores braved the lockdown so that police and other public safety workers could refuel, according to Karen Raskopf, chief communications officer for Dunkin' Brands. The company's Watertown, Massachusetts, stores provided free coffee and donuts for police officers, according to the company's twitter feed.

Kurt Schwartz, director of emergency management services for the state, advised people who had made it to work to go home, saying it was safe for them to drive.

'Pretty Resilient'

"From an economic standpoint it has effects similar to that of being a snow day, however, the psychological ramifications of this are impossible to assess," said Ward McCarthy, a Boston native and chief financial economist at Jefferies LLC in New York. "They tend to be pretty resilient people up there, but this will be a test of their resolve."

Technology enabled many companies to ride out the siege. John Reilly, a spokesman for Boston-based MFS Investment Management, said the company was open, but had declared a work- from-home day early this morning after learning the transit system was closed.

MFS activated a computerized system that alerted employees via phone. The firm had a scheduled test on Monday, the day of the bombing, and almost all employees have the ability to work from home.

The MFS office is about four blocks from the site of the marathon blast. It also has some people working from a backup facility in Marlborough, which can accommodate as many as 250 people.

Storage Computers

Likewise, EMC Corp., the world's biggest maker of storage computers with headquarters in Hopkinton, where the Boston Marathon begins, expects no operational impact. "Everyone has capabilities to work at home and remain productive," spokesman Dave Farmer said by telephone.

Biogen Idec Inc., the fourth-largest U.S. biotechnology company, closed its offices in Cambridge and Somerville, Massachusetts, said Amanda Galgay, a spokeswoman. The maker of multiple sclerosis medications, including the recently approved Tecfidera, continued manufacturing "with a scaled-down crew," Galgay said.

"There is no significant disruption or impact to our business," Galgay said. "Our manufacturing operations are continuing and there's no concern around ongoing research work."

Eerie Quiet

Despite an eerie quiet at the heart of the nation's 10th largest metropolitan area and televised police sweeps in the neighboring communities of Cambridge and Watertown, little lasting economic damage is likely. In February, unemployment in the Boston-Cambridge-Quincy region was 5.4 percent, down from 5.9 percent one year earlier and two percentage points below the national figure.

Yelena Shulyatyeva, an economist at BNP Paribas in New York, said the Boston bombing may temporarily dent consumer confidence.

"But it doesn't necessarily mean it will affect consumption itself," she said. "People react to the news, but it's harder to change their buying patterns."

Harvard University and MIT closed this morning, as did other Boston-area colleges, including Boston University, Boston College, Simmons College, the Berklee College of Music, University of Massachusetts Boston and Suffolk University. The Boston area includes at least 85 colleges and universities that employ more than 70,000, according to a 2009 report from the Bureau of Labor Statistics.

Better Security

"If there's going to be a negative impact, I think it's actually going to be pretty short-lived," said John Herrmann, director of U.S. Rate Strategy at Mitsubishi UFJ Securities in New York. "I've talked to friends in the area and they said they have no intention of changing their lifestyles. I would expect the area to come back very, very rapidly and probably even stronger than where it is now, because of the attention and because security will be better."

Some companies sought to make a statement with their response to the threat.

"The point of this kind of terrorism is to generate enough widespread fear and panic that a society freezes up and stops functioning," Jonathan Bush, chief executive officer of Athenahealth Inc., wrote on the company website. "At Athenahealth, we don't allow that. We don't flinch."

Medical Records

The provider of electronic medical records and billing services for doctors shut down its headquarters in the heart of the manhunt in Watertown, Massachusetts, Holly Spring, a company spokeswoman, said in an e-mail. More than 1,000 employees normally work at the sprawling campus of brick-faced office buildings, a former military manufacturing site, which instead became a gathering point for some law enforcement officers in the area, Spring said.

The company has shifted work to locations in Belfast, Maine, and elsewhere and remains "fully operational," Spring said.

"Certainly we have been affected, but are doing our best to keep things going," Tom Hughes, chief executive officer of Zafgen Inc., a closely held company developing an obesity drug, wrote in an e-mail. Zafgen is based in Cambridge, Massachusetts, close to MIT.

Zafgen doesn't anticipate interruptions to laboratory work as a result of the lockdown, though the company has encountered those difficulties before, Hughes said. During superstorm Sandy last October, the company had to adjust a study in New Jersey testing toxicity because workers couldn't be present as much as hoped to evaluate the animals, he said.

Locked Out

"One could see how that would have an impact," Hughes said. "I can imagine all of the lab-based companies in Cambridge will lose significant numbers of experiments since their people are locked out."

Elsewhere, Massachusetts General Hospital delayed scheduled patient discharges and rescheduled outpatient treatments, Ann Prestipino, the hospital's incident commander, said in a statement on its website.

Bill Daly, senior vice president at Control Risks, a security firm in New York, said: "I'd liken it to a major weather event but there are some nuances that don't make it like weather."

If the manhunt isn't concluded quickly, he said, the economic damage would mount. Any lengthy shutdown would be "extremely draining as opposed to knowing there's a storm that's going to come and go."

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A police officer for the Massachusetts Institute of Technology was shot to death on Thursday night at the school's Cambridge campus, touching off a manhunt for a suspect or suspects in a community on edge just days after the Boston Marathon bombing. Follow us at http://twitter.com/photosSMH